REGULATORY ANALYSIS
FOR PROPOSED AMENDMENT TO
 THE WORKERS' COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

1.	Description of classes of persons who will be affected by the proposed rules, including classes that will bear the costs of the proposed rule and classes that will benefit from the proposed rule.

The classes of persons affected by the rule are:  insured employers, insurance carriers that write workers’ compensation coverage in Colorado, and the Colorado operations of employers who self-insure for their workers’ compensation risk in Colorado.

2.	Description of the probable quantitative and qualitative impact of the proposed rule, economic or otherwise, upon the classes affected of persons.

This rule amendment removes any requirement that claimants accept the insurer’s admission of liability with respect to permanent total disability in order to receive a lump sum payment of a workers’ compensation award. This will allow claimants to receive a lump sum payout of uncontested permanent partial benefits while continuing to pursue additional benefits if they are arguing that they are permanently and totally disabled.  Lump sum payouts do not increase the level of benefits owed to claimants; they merely change the time over which they are disbursed with a calculated discount of the present value of the benefit. This will not, therefore, have an economic impact on stakeholders in the workers’ compensation system.

3.	Probable costs to the agency and other agencies of the implementation and enforcement of the proposed rule and any anticipated effect on state revenues.

There is no expected cost to the agency, or any other agency, for this rule change.    

4.	Comparison of the probable costs and benefits of the proposed rule to the probable costs and benefits of inaction. 

Pursuant to legislation adopted during the 2010 legislation session, this rule amendment is needed to be in conformance with new statute effective July 1, 2010. The new statute and the proposed amendment will allow some claimants under specific circumstances the option of receiving lump sum payouts that doesn’t currently exist. As noted above, this isn’t expected to create a new cost for the insurer or a new award for the claimant. Inaction would result in the Division being out of compliance with a statutory mandate. 

5.	Determination of whether there are less costly or less intrusive methods for achieving the purpose of the proposed rule.

There are no less costly or less intrusive means to achieve the rule’s purpose. 

6.	Description of any alternative methods for achieving the purpose of the proposed rule that were seriously considered by the agency and the reasons they were rejected in favor of the proposed rule.

Different wording of the proposed amendment was considered, but the overall goal of harmonizing with statute was always the objective. The current proposed language is considered to be the most compact and informative. 

Copies of the Notice of Public Hearing were provided to the:

Colorado Association of School Boards, 
Colorado Counties, Inc.
Colorado Municipal League
Special District Association of Colorado
Colorado Health and Hospital Association
Colorado Association of Commerce and Industry
Mountain States Employers Council
Colorado Self-Insurers Association